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Industry Analysis

Research Methodology

Key Insights

B2B Segment

Competitive Landscape

Brand Communicati on

Marketing
Mix

Distribution

Implementa tion

Bottled Water industry in India is expected to increase by a CAGR of 24% in volume terms over the forecast period 2011-2016 Market size(2012) Rs 129 billion

Key Growth Factors


High awareness of safety and hygiene Increasing awareness of water borne diseases Rapid growth amongst middle and lower income groups Acute water shortages in many parts of the country Strong Distribution Networks Govt. failure to address the need for basic services

In 2012, value growth in bottled water market was 29%. Sales of bottled water are growing at a faster pace than other soft drinks categories, such as carbonates

Bottled Water Brand Shares 2012


21% 2% 8% 11% 15% 43% Bisleri Aquafina Kinley Oxyrich Bailley Others

Source: Euromonitor

Source: epa.gov

Industry Analysis

Research Methodology

Key Insights

B2B Segment

Competitive Landscape

Brand Communicati on

Marketing
Mix

Distribution

Implementa tion

Porters Five Forces Analysis

Threat of New Entrants - Moderate - Market dominated by existing players - High input costs

Customers Bargaining Power - Low - No. of producers is less - Low awareness about difference between different product categories

Rivalry amongst competitors - High -Oligopolistic Competition - High competition to increase market share

Suppliers bargaining power - Low - Abundant supply of raw material

Threat of Substitutes - High - Tea, coffee, juices & soft drinks are substitutes to water - Aquaguard and RO The segment is growing at a CAGR of about 25 per cent and is likely to touch Rs 7,000 crore by 2015 from the current level of about Rs 3,200 crore

Industry Analysis

Research Methodology

Key Insights

B2B Segment

Competitive Landscape

Brand Communicati on

Marketing
Mix

Distribution

Implementa tion

PROBLEM APPROACH To understand the consumer insights of the bottled water market in tier 2 and tier 3 consumer segments, we interviewed consumers across different cities (5 tier 1, 5 tier 2 & 3 tier 3), conducted pilot surveys (33) and interviewed the Retailers/ Convenience Stores/ Supermarkets. We derived the basic factors which drive the sales of the bottled water industry.
Online Databases:
Euromonitor for analyzing key trends prevalent in the Indian market.

Projective techniques TOMA:


Consumers were asked about the top of the mind awareness of brands across various bottled water brands to understand the effect of promotional mix of different players.

Consumer In-depth Interviews: The group conducted 8 in depth interviews to understand the consumer perceptions and
preferences of various detergent brands. Non-users were also interviewed to understand their perception about washing clothes and detergent usuage.

Secondary Research
Primary Research

Pilot Surveys: We conducted a pilot survey with a sample of 33 respondents across segments to _ test the effectiveness of the questionnaire and research methodology. Gathered Information from Retailers/ Convenience Stores/ Supermarkets etc.:
Personal interviews were conducted with the owners of departmental stores to get a better understanding of the latent needs of the consumers.

Online Literature Review:


Content analysis to investigate the studies already conducted on similar topics .
Consumer IDIs Pilot Surveys

Tier-1 Cities 5 13

Tier-2 Cities 5 8

Tier-3 Cities 3 12

TOTA L 13 33

Industry Analysis

Research Methodology

Key Insights

B2B Segment

Competitive Landscape

Brand Communicati on

Marketing
Mix

Distribution

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MARKETING RESEARCH OBJECTIVES

*RO stands for Research Objective

RO-1

To determine the choice criteria consumers use while deciding to purchase To determine the attributes of bottled water To understand consumer knowledge of different types of bottled water To estimate the price elasticity of demand

RO-2

RO-3

RO-3

RO-6

To identify the preferred channel of purchase


To identify if utilitarian packaging will be attractive to the customers

RO-7

Industry Analysis

Research Methodology

Key Insights

B2B Segment

Competitive Landscape

Brand Communicati on

Marketing
Mix

Distribution

Implementa tion

A. INSIGHTS from CUSTOMERS


Mr. Shah, Business Man, Ahmedabad

I really like the look and feel of Himalayan bottles. Its a bottle I would like to use regularly Monisha, College student , Mumbai

Consumers were unsure of how safe most of the local brands were

76% of all consumers were unaware of the differences

Consumers showed concerns about safety of local brand

Almost all consumers only bought water when thirsty

Mostly impulse purchase


100% of the respondents found packaging of Himalayan better

Low awareness about difference in different types of bottled water

Consumers are favorable to better packaging

85% consumers preferred cheaper brands but had no particular preference for any one

Brand loyalty is very low

Key Insights

Taste is not much of a concern for most consumers

Only 9% consumers considered taste as an important factor

Industry Analysis

Research Methodology

Key Insights

B2B Segment

Competitive Landscape

Brand Communicati on

Marketing
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Implementa tion

B. INSIGHTS from various OUTLETS/ CONVENIENCE STORES/ HYPERMARKETS/ SUPERMARKETS/ RETAILERS Incentives offered by most companies Capacity (liters) liter (24pc per crate) 1 liter (12pc per crate) 2 liter (9pc per crate) 20 liter Schemes to Retailers 3 bottles of 500ml are given free 3 and sometimes 4 bottles of 1l are given free 2 bottles of 2 l are given free Retailers prefer local brands for this size Some Key Insights

Customers almost never ask for a particular brand. They mostly ask for just Mineral Water
Most retailers only stock a single brand of water Customers dont generally ask if any particular brand is better than others Consumers are mostly travellers or tourists Customers generally prefer cheaper brands

20 - Sonu, Convenience shop owner, Lucknow

Almost all retailers preferred to stock 20 liter of local brands as consumers generally prefer them

Industry Analysis

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B2B Segment

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AVAILABLE OPTIONS
Existing Product

Segment North East West South

Share (%) 27 12 36 25
Existing Market

Market Penetration
- Geographical Expansion - Clientele Extension - B2B growing faster than B2C

Market Development
- Enter Retail channel - Need to develop strong distribution network - Phased implementation to counter competition

Product Development
- Emerging market for tonic, sparkling or flavored water - Might cannibalize existing product as new products would be targeted at the same market

Diversification
- High Costs, High risks

- Not enough scale or resources to explore other avenues

New Product

New Market

Source: Euromonitor

Industry Analysis

Research Methodology

Key Insights

B2B Segment

Competitive Landscape

Brand Communicati on

Marketing
Mix

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Implementa tion

FOCUS ON B2B- INSTITUTIONAL CHANNEL

B2B v/s B2C 8%


B2B

Continued Focus on Institutional Channel


Geographic Expansion Clientele Extension OOH Advertising

92%

B2C

Source: Euromonitor

B2B channel accounts for 8% of the bottled water industry B2B segment showed high double digit growth of 25% in 2011 Majorly consists of the followingAviation Sector

Expand to southern states of India Target urban cities in southern India Low distribution costs due to proximity to the source of raw material States along the western coastline are relatively more affluent

Collaboration with Coffee shops and Fast Food Outlets CCD/Barista etc. Tie ups with major airports Target major international airports Tie-ups with gourmet restaurants & executive lounges Tie ups with premium Hospitals

Safe Drinking Water campaigns in hospitals Airport advertising and display ads near premium hotel

Advertisements in inflight magazines

Hospitality Sector
Entertainment Zones

Industry Analysis

Research Methodology

Key Insights

B2B Segment

Competitive Landscape

Brand Communicati on

Marketing
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Implementa tion

FOCUS ON B2B- INSTITUTIONAL CHANNEL

Source: Market Research Society of India

Affluent states along the western coastline

Industry Analysis

Research Methodology

Key Insights

B2B Segment

Competitive Landscape

Brand Communicati on

Marketing
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Competitive Landscape in Retail & Bulk Market

Kinley

Bisleri

Aquafina

Targeted at on the Go Lifestyle customer looking for hygeinic and trustworthy pure water Positioning- TRUST Boond Boond mein Vishwas Strategic Advantage- Coca Colas brand equity & vast distribution network

Targeted at price conscious consumer who is looking for healthy and safe drinking water Positioning- SAFETY Stay Protected Strategic Advantage- Brand equity & vast distribution network Using its strong brand equity to revive Vedica

Targeted at consumers who value purity and are also looking for good taste Positioning- PURITY Pure Water, Perfect Taste Strategic Advantage- Brand equity of Pepsi & vast distribution network Also exploring flavored water market

Industry Analysis

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B2B Segment

Competitive Landscape

Brand Communicati on

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Competitive Landscape in Retail & Bulk Market Even though brand loyalty is low, strong brand equity helps fight off local players 92% of tier 1 cities preferred only branded bottled water

Strong Brand Equity

PepsiCo, Coca Cola and Parle- 3 of the biggest FMCG giants

What is common to Bisleri, Kinley & Aquafina??

All three run extensive TV and Print media advertisements

Robust Distribution Network

Extensive Marketing Initiatives

Industry Analysis

Research Methodology

Key Insights

B2B Segment

Competitive Landscape

Brand Communicati on

Marketing
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Implementa tion

Brand Communication

Ahmedabad There is a strong need for people to be aware of Aava as a brand, and the difference between Natural Mineral Water and Packaged Drinking Wate

Consumers associate Aava with a water company but dont know anything else about it

Brand Awareness Brand Recognition

Industry Analysis

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Key Insights

B2B Segment

Competitive Landscape

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Brand Communication

Raise doubts about the credibility of the packaged drinking water.


Needs chemical treatment to remove odour

No guarantee of the source

Differentiate from packaged drinking water

Highlight the natural source

Aravalli is the oldest water source on the planet. Even before the Alps & Himalayas

Convey Credibility

IBS Certification Clean room technology State of the art Manufacturing Plant

Industry Analysis

Research Methodology

Key Insights

B2B Segment

Competitive Landscape

Brand Communicati on

Marketing
Mix

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Implementa tion

PRODUCT
The AAVA product already has a unique existing offering in the market. We propose a 3-pronged strategy to expand its market

Mid sized multi utility variants A 2l and 5l variant with filter caps
A premium bottled

variety with thick packaging material and wide mouths to encourage reuse

Venture into the nascent Flavored water market Introduce popular yet uncommon variants like Peach, strawberry and pineapple Manufacturing expertise can lead to speedy conversion cycle Leverage the relative ease in obtaining licenses

Introduction of Club soda to its product portfolio Soda can be made available to institutional channels AAVA caters to like: Airports Restaurants and Bars Low brand awareness and switching costs leads to low entry barriers

Industry Analysis

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PRICE
Price all SKUs at points marginally lower than its direct competitor, Himalayan Proposed mid sized SKUs of 2L and 5L. to be made available at MRPs of Rs. 35 and 45 Lower distribution costs should be leveraged to price the products competitively SKUs 200ml 500ml 1 l. 20 l. Prices Gujarat (in Rs.) 6 10 20 70 Prices outside Gujarat (in Rs.) 7 15 30 250

A major challenge to pricing will be the high bargaining power of Distributors/ Retailers. However, to enter the retail space initially margins will have to be compromised

PLACE
Where? Channel? Which SKUs

Select urban cities across western & southern states


Gujarat, Maharashtra, Goa, Kerala, AP, Karnataka, Tamil Nadu

Focus on modern retail as small stores will not be able to generate significant sales Club Soda and flavored water will be promoted in Clubs, Bars, Restaurants, Multiplexes, Airlines

Entire range in more upscale locations


Only 1liter and 2liter SKUs in other outlets

A Big Bazaar in Malabar Hill is different from a Borivali

Industry Analysis

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Competitive Landscape

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PROMOTION
Display ads in affluent parts of cities Airport advertising and display ads near premium hotels Advertisements in in-flight magazines

OOH Advertising

Television and local newspaper advertising

Seasonal advertisements on channels viewed by the target market segment E.g. TLC, Tennis Grand Slams, Formula 1 , cricket matches Prominent advertisements in leading dailies to create brand awareness and recall Sponsorship of events like Cricket tournaments and fashion shows (Himalayan uses this strategy) Push marketing strategy- will give incentive to retailers to promote Aava

Promotions

Guerilla Marketing

Movie and TV Sitcoms


Place Aava strategically in Movies and TV sitcoms targeted at the same premium segment Movies- Fashion, Heroine, Ayesha TV Sitcoms- K Serials Celebrity Endorsements

CSR
Aava Care- Similar concept to Coca Cola Happiness Truck

Seasonal Packing
Consumer always connect better with seasonal marketing Special packaging during festive seasons of Diwali, Holi, Ganesh Chaturthi, Navratri

Industry Analysis

Research Methodology

Key Insights

B2B Segment

Competitive Landscape

Brand Communicati on

Marketing
Mix

Distribution

Implementa tion

DISTRIBUTION
Proposed Distribution Network
Manufacturing Plant Key Accounts Company warehouse Institutional Buyers Organisations that buy large quantities in one single order Restaurants, Hotel, Aviation sector, Outlets where considerable amount of stock is kept for future consumption Departmental Stores, Supermarkets Immediate consumption Outlets that require stocks on a daily basis, All the outlets that come in a particular area or an area along with its neighboring areas are catered to

Distributors

Distribution Routes

Future Consumption

Retailers

General Customers

Larger retailers like supermarkets will be serviced directly by the companys warehouses

Pepsico, Coke & Parle enjoy higher bargaining power compared to Aava Distributors main motive- MARGINS (Greater money rotation) Need to incentivize more o Longer credit line o Higher margins

Industry Analysis

Research Methodology

Key Insights

B2B Segment

Competitive Landscape

Brand Communicati on

Marketing
Mix

Distribution

Implementa tion

EXECUTION PLAN
We propose, a phase wise implementation plan in order to: Minimize risk Increase capacity utilization uniformly

V/S

Phase 1

Phase 2

Phase 3

Enter the retail market in only select geographies like Gujarat and Maharashtra Improve distribution network to reach affluent locations in prime cities of Gujarat and Maharashtra Brand communication of utmost importance Employ television advertising, newspaper ads and social media campaigns to increase brand awareness across the country

Gradually phase out to nearby states like Goa, Andhra Pradesh and Karnataka Capitalize on lower distribution costs to gain advantage over competitors like Himalayan Release Club Soda along with a marketing campaign Start guerilla and other covert marketing

Pan-India presence in the retail and bulk market space Well established distribution network across the country Release Flavored water in Urban cities Explore export opportunities to Middle East, South East Asia and Southern Europe

Industry Analysis

Research Methodology

Key Insights

B2B Segment

Competitive Landscape

Brand Communicati on

Marketing
Mix

Distribution

Implementa tion

APPENDIX
PERCEPTUAL MAP COST STRUCTURE

30%
Packaging Oxyrich

Raw Material

30%
Manufacturing Cost Taxes

Aava

10%

30%
Dimension III Taste is good Aquafina Price Kinley Availability Bisleri

Transport+Misc ellaneous

Better for health

Himalaya

Perceptual Map Interpretation: Length of a line denotes the importance of that Attribute and Red Dots represents a brands positioning in the market (in accordance with the features).

Dimension

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